Palm Coast, Florida – August 1, 2008 – Two Ginn Company affiliated entities failed to make payment on both principal and interest payments on first and second-lien debt due June 30, 2008. (see story) The lender granted a 30-day forbearance which expired yesterday. Both parties continue to negotiate a solution. Ginn owns and operates several properties in Palm Coast, Florida; Hammock Beach, The Conservatory, Yacht Harbor Village, and The Gardens. They are not affected by these credit facilities. Four Ginn properties are affected; Ginn sur Mer in the Bahamas, Tesoro in Port St. Lucie, Quail West near Naples, and Laurelmor, in the western NC Mountains.
In the meantime, Ginn President Robert Gidel issued an interim statement reproduced here:
Statement by Ginn President Robert Gidel
"As we indicated to you last month, Ginn-LA CS Borrower, LLC and Ginn-LA Conduit Lender, Inc., the borrowing entities that entered into a credit facility with Credit Suisse, had entered into a 30-day agreement with the lending groups to engage in further negotiations in order to restructure the loan that was secured by property at Tesoro, Quail West, Ginn sur Mer, and Laurelmor."
"Although negotiations with the lending group have been ongoing and are continuing, our agreement did expire yesterday. Negotiations for a resolution are continuing and at this time we remain optimistic that this credit facility will be restructured in a manner beneficial to all parties."
"We want you to know that throughout the negotiation with the lending consortium, our primary focus has been on ensuring that our members and property owners are taken care of during, and after, this period. However, the lack of an agreement between the Borrowers and the lenders means that the Borrowers will have to make difficult decisions relating to its management and oversight of these four properties."
"The Borrower may have to discontinue the payment of certain dues and POA assessments on the lots that they own, which will put stress on the operations of the Clubs at Tesoro and Quail West."
"Regardless, as the current managers of the projects, we will do everything possible to provide for the orderly transition of these assets for the benefit of the Members, lot owners, and lenders."
"All of the remaining communities and development projects that The Ginn Companies, LLC, manage are separately owned and funded by the partnerships and LLC’s that own them. It is very important to understand that these projects have no financial relationship with those properties secured by the Credit Suisse loan, and therefore, this event will not cause any change in the direction or management of these properties."
"We are managing our way through some very challenging times in both the real estate market and the general economy. As previous cyclical downturns have shown, these times will eventually pass, and in the interim, we intend to do whatever is necessary to position the properties and developments that we manage to survive this period and be ready for growth when the market improves."